Asia-Pacific markets tracked Wall Street losses after U.S. January inflation came in hotter than expected, with the consumer price index climbing 3.1% on a 12-month basis and 0.3% for the month.
Economists polled by Dow Jones expected the CPI to have increased by 0.2% month over month in January and 2.9% on an annual basis.
Core prices, which exclude volatile food and energy components, rose 0.4% month over month and 3.9% from a year ago. Core CPI was expected to have increased 0.3% in January and 3.7% from a year earlier, respectively.
Hong Kong’s Hang Seng index led losses in Asia, plunging 1.7% at the open as the city returns to trade after the Lunar New Year holiday.
Japan’s Nikkei 225 retreated from 34-year highs, falling 0.78%, while the Topix saw a larger loss of 1.21%.
The Nikkei had rallied about 3% to breach the 38,000 mark briefly on Tuesday. It last touched that level in 1990.
Early Wednesday, Japan’s top currency diplomat Masato Kanda said that “recent movements in the foreign exchange market have been rapid” with regard to the yen, and authorities are watching these “with a high sense of urgency,” according to Reuters.
South Korea’s Kospi dropped 1.17%, with heavyweight Samsung Electronics losing nearly 2%, while the small-cap Kosdaq fell 0.81%.
In Australia, the S&P/ASX 200 slid 1.05%, extending its losing streak to a third day.
Overnight in the U.S., the hotter-than-expected inflation data saw all three major indexes lose ground, with the Dow Jones Industrial Average falling 1.35%, clocking its worst session since March 2023 on a percentage basis.
The S&P 500 slid 1.37%, while the Nasdaq Composite fell 1.8% to settle at 15,655.60.
— CNBC’s Lisa Kailai Han and Brian Evans contributed to this report
Japan 10-year government bond yields jump over 5% as yen weakens beyond 150
Yields on 10-year Japanese government bonds rose over 5.6% to 0.766 on Wednesday, their highest level since Dec. 11.
The move comes as the yen weakened for a seventh straight session, falling below the 150 mark against the dollar.
Under the Bank of Japan’s yield curve control policy, the BOJ targets 10-year JGB yields at around 0%, while keeping the upper limit at 1% “as a reference.”
— Lim Hui Jie
Japan’s yen breaches 150 against dollar, weakens for seventh straight day
Japan’s yen breached 150 against the dollar on Wednesday, weakening for a seventh straight session.
The country’s top currency diplomat Masato Kanda reportedly said that “recent movements in the foreign exchange market have been rapid” with regard to the yen.
Kanda also noted that authorities are watching the activity and would take “appropriate actions on forex if needed,” according to Reuters.
The Bank of Japan’s exit from negative interest rates and other policy measures have been on investors’ radar amid expectations of rate cuts by the U.S. Federal Reserve this year.
— Shreyashi Sanyal
Dow posts biggest one-day loss since March 2023
Stocks closed lower on Tuesday after January’s hotter-than-anticipated inflation report sent the equity market reeling early in the morning.
The Dow Jones Industrial Average dropped 524.63 points, or 1.35%, to settle at 38,272.75. It was the worst day for the 30-stock index since March 2023. The S&P 500 slipped 1.37% to close at 4,953.17, while the Nasdaq Composite shed 1.80% to finish at 15,655.60.
— Lisa Kailai Han
Oil prices rise despite stubborn U.S. inflation
Oil futures rose Tuesday despite stubborn inflation in the U.S. that dragged the stock market lower.
The West Texas Intermediate contract for March gained 95 cents, or 1.24%, to settle at $77.87 a barrel. The Brent contract for April settled at $82.77 a barrel, up 77 cents or 0.94%.
WTI has struggled to break out of a range of about $68 to $78 a barrel amid uncertainty over war in the Middle East and an unclear supply and demand outlook for the year.
WTI and Brent are up about 8.68% and 7.44%, respectively, for the year, however.
— Spencer Kimball
All S&P 500 sectors see losses
All 11 sectors that comprise the broad S&P 500 traded down at least 1% Tuesday afternoon. As a whole, the benchmark index lost about 1.8%.
Real estate stocks led the index lower, hurt by 5% drops in Boston Properties and Alexandria Real Estate Equities. The utilities and consumer discretionary sectors also weighed on the S&P 500, with each down more than 2%.
On the other hand, health care saw the smallest drop with a slide of 1.2%. Losses for the sector were mitigated by rallies of more than 2% in Incyte and McKesson.
— Alex Harring
